As a result of the Bipartisan Budget Act of 2015 (Budget Act), the Occupational Safety and Health Administration (OSHA) will increase its maximum civil monetary penalties for the first time since 1990.
The Budget Act requires federal agencies, including OSHA, to annually adjust civil monetary penalties based on the Consumer Price Index. Because OSHA has not increased its penalties since 1990, it must issue a catch up adjustment and is authorized to increase maximum penalties by up to 150 percent. Given the difference between the Consumer Price Index in 1990 and today, it is expected that OSHA maximum penalties will increase by about 80 percent. An 80 percent increase would raise the maximum civil penalty for a serious, other than serious, or failure to abate violation would increase from $7,000 to approximately $12,600. The penalty for willful and repeat violations would increase from $70,000 to approximately $126,000. The increased penalties will take effect in August 2016, without the benefit of public notice and comment.
OSHA’s assistant secretary, David Michaels, indicated his support for the increase in recent testimony before a federal subcommittee. Michaels stated:
OSHA penalties must be increased to provide a real disincentive for employers accepting injuries and worker deaths as a cost of doing business.
It remains to be seen whether there will be a reduction workplace injury as a result of the increased penalties. The increases are on the way, however, and employers may wish to take the time to evaluate their health and safety programs to ensure compliance.